Chicken or Egg? Brexit & the End of the EU

Patrick L Young is CEO of niche crowdfunding platform HanzaTrade and an advisor to fund managers throughout the world. Born in Ireland, he is an active investor in the “New Europe” amongst other emerging markets and is an active Co Founder of grassroots startup group "Mission ToRun."
Home Page: http://patricklyoung.net Twitter: @FrontierFinance

Viewed without Brussels’ standard issue rose tinted glasses, the
EU looks to be in a shambles. An increasingly defeatist oligarchy
is managing decline and ceding opportunity overseas. The EU is
becoming uncompetitive with a southern fringe of bankrupt
governments on life support so Germany can sell more BMWs.
Germany leverages eurozone benefits while Brussels appears
powerless to stop Berlin’s systematic trade surpluses, which
ultimately threaten the euro as much as Mediterranean weakness.
Europe continues to think and act like independent states, even
the student generation enjoying Erasmus exchanges return home
clearly appreciating separate national identity. Without the
flawed notion of a single European identity, the Europhile dream
has already failed.

Whatever happens, the Euro-oligarchy advocates “more Europe,”
while a bewildering surfeit of 1,200 new annual rules strangles
enterprise. The beggaring of Greece is an example of doctrinaire
vandalism following EU corporate socialist dogma. Brussels is
stuck in the 1950s, advocating protectionist industrial policy
for antediluvian multinationals at the expense of the new - a
reactionary analogue misfit in a globally competitive digital
world. Government and big business rules despite the future
belonging to flexible innovation. The more Europe tweaks its
social pledges, the poorer and less competitive the continent
becomes. The hubristic euro currency binds together economically
incompatible nations like a cheap PVC corset slims an overweight
wrestler. The corset is bursting at the seams...

EU foreign affairs are a fiasco. Corrupt mismanagement is
apparently rife: EU accounts have failed audits for two decades!
Nobody admits responsibility for multilateral chaos, which
resembles an absolutist and wasteful monarchy. Brussels remains
crassly aloof from everyday people. The Brussels Supreme Soviet
is living on borrowed time just as the Warsaw Pact could not
maintain its agitprop facade against economic reality.

On the western fringes, Britain remains a semi-detached
participant in many continental shenanigans. Meanwhile, many
British voters are concerned about the substantial influx of
economic migrants. Relative economic success means Britain is
subsidizing inefficient governments from Lisbon to Bucharest.
(Despite the immigration flood, British unemployment is half the
eurozone average).

Conservative electoral victory means renegotiation and referendum
for the second largest EU economy, constituting some 15 percent
of the entire 28 nations (Greece is, by comparison a minnow at
1.3 percent). As a net importer of EU goods, the continent has
much more to lose than Britain from protectionism - a simple
truth ignored by disingenuous Europhile arguments. Brexit does
not mean tariffs: UK/EU Free trade would continue as it already
does for every European non-member from Andorra to Macedonia.

The UK is tiring of an EU which runs contrary to Britain’s
international mercantile traditions and instead endorses
protectionism in everything from farming and fishing to digital
products. Withdrawal may benefit Britain significantly more than
the annual 50 billion dollars EU membership wasted on red tape
alone. Multinational corporate threats to quit Britain will prove
as false as they did when Britain didn’t join the euro and
thrived compared to the festering single currency area.

Europhile David Cameron risks a ‘false’ referendum based on fig
leaves of reform. Thus Britain may avoid Brexit but the EU itself
needs radical reform to survive. Real expansion stalled a decade
back. Dollops of cash for eastern nations mask the fact the EU
has already essentially abandoned expansion to Turkey and
Ukraine, amongst others. Meaningful economic growth remains
absent, leaving many citizens impoverished while Europe is a
foreign policy irrelevance. It has a few nice tourist spots,
though...albeit there is frequently much better value (and
service) to be had elsewhere.

From the high water mark where the EU could demand referendum
reruns to ensure the voters got the answer right, the last decade
has revealed the ugly truth of decay. Past experiments have shown
currency unions without political union don’t work. The eurozone
is in tatters. Loudly trumpeted and false dawns have seen
dizzying debt increases without desperately needed reform.

The UK faces a simple dilemma - bet on a losing horse, or choose
a free trading dynamic response to the digital world where
economic power is moving east.

How much longer can the EU survive after a lost decade broadly
mired in depression/recession, punctuated by the consistently
inaccurate prognosis that recovery is looming? (Alas, it may be
years but collapse is increasingly looking inevitable). Whether
the UK leaves now is only a footnote in this sorry tale.

The EU must respond to the strongest British calls for reform, or
risk its own demise.

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.